Cummings launches probe of for-profit schools

John Fritze, The Baltimore Sun

Rep. Elijah E. Cummings said Monday he is launching an investigation into the salaries and bonuses paid to the top executives of for-profit colleges, noting that a majority of their revenue comes from students who are receiving federal tuition aid.

Cummings, the top-ranking Democrat on the House Oversight Committee, sent letters to 13 schools requesting their senior executive contracts. The Baltimore lawmaker said he wants to determine whether salaries, bonuses and other compensation are tied to student performance.

The schools have recently come under scrutiny from lawmakers in Washington and Annapolis. A series of reports by undercover auditors with the U.S. Government Accountability Office found some of the schools gave passing grades for plagiarized and shoddy work.

"If the American taxpayers are funding the majority of these schools' operations, I believe we have the right — not only do we have a right, but we have an obligation — to understand how our money is being used," Cummings said during a speech Monday at the AFL-CIO headquarters.

A spokesman for a trade group that represents nine of the 13 schools called Cummings' effort misguided and politically motivated and suggested the congressman should also explore salaries for football and basketball coaches at many of the nation's top-ranked universities.

The investigation "unfortunately fails to acknowledge the important role private-sector colleges and universities have in educating nontraditional students to compete for jobs in a very difficult economic environment," Brian Moran, interim chief executive officer and president of the Association of Private Sector Colleges and Universities, said in a statement.

But Moran declined to be interviewed about the thrust of Cummings' claims.

Broadly, the group argues that the for-profit schools provide prospective students with a more affordable approach to earning a degree.

For most of the schools, compensation information is already available through U.S. Securities and Exchange Commission filings. For instance, DeVry reported paying its president a $788,067 annual salary alongside $5.3 million in stock options and other compensation. The school reported that 73 percent of its revenue in 2010 came from state and federal tuition aid.

A DeVry spokesman said the university will send public documents to Cummings.

But many of the schools' officials were not willing to say whether they would provide the details Cummings appears to be seeking. The House Oversight Committee has subpoena power, but it is wielded by the Republican majority.

Cummings has made executive compensation a top issue during his tenure, including efforts to limit salaries and bonuses for executives at Wall Street firms that benefited from federal bailouts.

Rick Castellano, director of public relations for the University of Phoenix, said school officials welcome transparency and accountability, but he could not say if they would provide the specific documents Cummings had requested.

"We seek to ensure our students are prepared for the workforce," Castellano said in a statement, "and hope all schools will do the same."